How to Rent out Your Council House

By
David M. Murray, Jr.
Updated March 28, 2017

Local governing authorities in the United Kingdom ensure that those in need have a place to live by providing Council Housing with affordable rent. A tenant may not rent out his Council House because it is against the law. However, the Housing Act of 1985 gave tenants the right to buy their Council House. Thus, if you really wanted to rent out your Council House, you could buy your Council House and then do whatever you wanted to with it thereafter. The right-to-buy rules changed in 2005, but there are still tremendous opportunities for tenants to purchase their Council House at a discount, and to then rent them out at a figure which will equal or exceed their mortgage payment.

Step 1

Rent your Council House for at least 2 years, but if your tenancy began after January 18, 2005, then it must extend for a period of 5 years before you have the right to buy your Council House.

Step 2

Request a Right-to-Buy package from your local governing authority (landlord), fill out the application and return it.

Step 3

Have an independent appraiser visit the property and establish its value. Make your home available to him. Shortly thereafter, a written offer with purchase price amount will be sent to the prospective buyer/tenant.

Step 4

Tenant must act to accept the offer if he is so inclined within 2 months.

Step 5

Tenant must secure the funds necessary to purchase the Council House. Once this is accomplished, tenant must hire a solicitor to finalize the purchase of the Council House.

Step 6

Once the tenant is the owner of his Council House, he can advertise his property for rent and rent out his Council House.

Tip

In order to make renting out your Council House an attractive proposition, you must purchase at a discount below market value. Under the Right-to-Buy rules, the longer you have been a Council House tenant, the better your discount when you decide to purchase. Rent your Council House for an amount equal to or greater than your mortgage payment, remembering also that as the landlord you are responsible for all repairs.

Warning

There are a number of Right-to-Buy lenders willing to help a Council House tenant purchase his Council House despite credit problems or a lack of income on the part of the potential borrower. These lenders will even advance additional funds for repairs to your Council House. Do not commit yourself to a monthly mortgage payment that you cannot handle. Once you fall behind on your mortgage payments, the lender's remedy is foreclosure and you can lose your property.